Friday, October 04, 2013

Tips on Bidding Foreclosed Properties with Unionbank

So after winning at the property bidding with Unionbank, I just feel obligated to share some tips I learned from the bidding. I will divide my tips into Before, During and After bidding.

Before Bidding
1. Do Due Diligence. This is a no-brainer tip. Acquiring a property involves money and of course we don't want to put to waste the money we earned with our sweat and blood.  Check at the location site and see for yourself what you are buying for. Know the topography and elevation of the area. you wouldn't want to have a property which is flood prone, it would take a toll on you in the future.

2. Check the copy of the title of the property at the local Registry of Deeds. Titles are a public property and you could request a photocopy with a fee. This is to check on the Encumbrances at the back of the title. Unfortunately, it take 2-3 working days before they release the copy.

3. Prepare your show money. At Unionbank, bidder has to prepare Php20,000 per property he wishes to bid. This money will be collected when the bidder won the property. Other banks will require you to have manager's check of do a deposit before bidding. Always inquire with the nearest bank of their show money requirements as this may be one reason that others get disqualified during biddings.

During Bidding
1. Don't be late. Bidding usually starts on time. And bidding on a property takes only minutes. You wouldn't want to miss on the opportunity of acquiring the prime lots. When we attended the bid, the bidding only took 20 minutes. While we were filling up forms, another couple arrived to bid (they were after Priority Lot #1 as well). yet the bidding was over. If they have come, they might have won our property as the guy partner was a foreigner.

2.  Do Computations while Bidding. Compute for the total price and price per sqm of the property you are auctioning. Foreclosed properties are usually of lower value, and we are after that opportunity. But as bidding continues and prices climbs, it is good to check the price per sqm to check if the value is still viable.

After Bidding
1. Read the contract. So you have won, Congratulation! But you are not fully committed to the property unless you signed the contract. READ it. If you are ammenable to the terms written in the contract, sign it.

2. Know your capacity to pay.  The bank will offer you the term of payment. You could have it as short as 3 months or as long as 10 years. The longer the term the higher the interest. 

*Note, Unionbank does not allow the use or any improvements in the property unless it is fully paid, so unless we fully pay, we can't build our home. This is one of their terms which is beneficial to know when you read contracts.

3. Submit other requirements. The bank will require other requirements like IDs and other documents they wish you to sign. As for Unionbank, we were required to submit post-dated checks based on the payment schedule.

4. Follow the payment schedule. If you want to avoid penalties for late payments, follow their schedule. Fund your checking account to ensure that the checks you submitted have funds. This does not only avoid you from bank penalties but also an estafa case.

I hope you guys, got a thing or two from these tips. If you happen to join a property bidding, share your experience in comments below.

Happy investing everyone!

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